CA Civil Code 2932.5 – Assignment”Where a power to sell real property is
given to a mortgagee, or other encumbrancer, in an instrument intended
to secure the payment of money, the power is part of the security and
vests in any person who by assignment becomes entitled to payment of the
money secured by the instrument. The power of sale may be exercised by
the assignee if the assignment is duly acknowledged and recorded.”

Landmark vs Kesler – While this is a matter of first impression in
Kansas, other jurisdictions have issued opinions on similar and related
issues, and, while we do not consider those opinions binding in the
current litigation, we find them to be useful guideposts in our analysis
of the issues before us.”

“Black’s Law Dictionary defines a nominee as “[a] person designated to
act in place of another, usu. in a very limited way” and as “[a] party
who holds bare legal title for the benefit of others or who receives and
distributes funds for the benefit of others.” Black’s Law Dictionary
1076 (8th ed. 2004). This definition suggests that a nominee possesses
few or no legally enforceable rights beyond those of a principal whom
the nominee serves……..The legal status of a nominee, then, depends
on the context of the relationship of the nominee to its principal.
Various courts have interpreted the relationship of MERS and the lender
as an agency relationship.”

“LaSalle Bank Nat. Ass’n v. Lamy, 2006 WL 2251721, at *2 (N.Y. Sup.
2006) (unpublished opinion) (“A nominee of the owner of a note and
mortgage may not effectively assign the note and mortgage to another for
want of an ownership interest in said note and mortgage by the
nominee.”)”

The law generally understands that a mortgagee is not distinct from a
lender: a mortgagee is “[o]ne to whom property is mortgaged: the
mortgage creditor, or lender.” Black’s Law Dictionary 1034 (8th ed.
2004). By statute, assignment of the mortgage carries with it the
assignment of the debt. K.S.A. 58-2323. Although MERS asserts that,
under some situations, the mortgage document purports to give it the
same rights as the lender, the document consistently refers only to
rights of the lender, including rights to receive notice of litigation,
to collect payments, and to enforce the debt obligation. The document
consistently limits MERS to acting “solely” as the nominee of the
lender.

Indeed, in the event that a mortgage loan somehow separates interests of
the note and the deed of trust, with the deed of trust lying with some
independent entity, the mortgage may become unenforceable.

“The practical effect of splitting the deed of trust from the promissory
note is to make it impossible for the holder of the note to foreclose,
unless the holder of the deed of trust is the agent of the holder of the
note. [Citation omitted.] Without the agency relationship, the person
holding only the note lacks the power to foreclose in the event of
default. The person holding only the deed of trust will never experience
default because only the holder of the note is entitled to payment of
the underlying obligation. [Citation omitted.] The mortgage loan becomes
ineffectual when the note holder did not also hold the deed of trust.”
Bellistri v. Ocwen Loan Servicing, LLC, 284 S.W.3d 619, 623 (Mo. App.
2009).

“MERS never held the promissory note,thus its assignment of the deed of
trust to Ocwen separate from the note had no force.” 284 S.W.3d at 624;
see also In re Wilhelm, 407 B.R. 392 (Bankr. D. Idaho 2009) (standard
mortgage note language does not expressly or implicitly authorize MERS
to transfer the note); In re Vargas, 396 B.R. 511, 517 (Bankr. C.D. Cal.
2008) (“[I]f FHM has transferred the note, MERS is no longer an
authorized agent of the holder unless it has a separate agency contract
with the new undisclosed principal. MERS presents no evidence as to who
owns the note, or of any authorization to act on behalf of the present
owner.”); Saxon Mortgage Services, Inc. v. Hillery, 2008 WL 5170180
(N.D. Cal. 2008) (unpublished opinion) (“[F]or there to be a valid
assignment, there must be more than just assignment of the deed alone;
the note must also be assigned. . . . MERS purportedly assigned both the
deed of trust and the promissory note. . . . However, there is no
evidence of record that establishes that MERS either held the promissory
note or was given the authority . . . to assign the note.”).

What stake in the outcome of an independent action for foreclosure could
MERS have? It did not lend the money to Kesler or to anyone else
involved in this case. Neither Kesler nor anyone else involved in the
case was required by statute or contract to pay money to MERS on the
mortgage. See Sheridan, ___ B.R. at ___ (“MERS is not an economic
‘beneficiary’ under the Deed of Trust. It is owed and will collect no
money from Debtors under the Note, nor will it realize the value of the
Property through foreclosure of the Deed of Trust in the event the Note
is not paid.”). If MERS is only the mortgagee, without ownership of the
mortgage instrument, it does not have an enforceable right. See Vargas,
396 B.R. 517 (“[w]hile the note is ‘essential,’ the mortgage is only ‘an
incident’ to the note” [quoting Carpenter v. Longan, 16 Wall. 271, 83
U.S. 271, 275, 21 L. Ed 313 (1872)]).

* MERS had no Beneficial Interest in the Note,
* MERS and the limited agency authority it has under the dot does
not continue with the assignment of the mortgage or dot absent a
ratification or a separate agency agreement between mers and the
assignee.
* The Note and the Deed of Trust were separated at or shortly
after origination upon endorsement and negotiation of the note rendering
the dot a nullity
* MERS never has any power or legal authority to transfer the note
to any entity;
* mers never has a beneficial interest in the note and pays
nothing of value for the note.

Bankr. Code 547 provides, among other things, that an unsecured
creditor who had won a race to an interest in the debtor’s property
using the state remedies system within 90 days of the filing of the
bankruptcy petition may have to forfeit its winnings (without
compensation for any expenses it may have incurred in winning the race)
for the benefit of all unsecured creditors. The section therefore
prevents certain creditors from being preferred over others (hence,
section 547 of the Bankruptcy Code is titled “Preferences).” An
additional effect of the section (and one of its stated purposes) may be
to discourage some unsecured creditors from aggressively pursuing the
debtor under the state remedies system, thus affording the debtor more
breathing space outside bankruptcy, for fear that money spent using the
state remedies system will be wasted if the debtor files a bankruptcy
petition.

. Bankr. Code 547(c) provides several important exceptions to the
preference avoidance power.

Bankr. Code 547 permits avoidance of liens obtained within the 90 day
(or one year) period: the creation of a lien on property of the debtor,
whether voluntary, such as through a consensual lien, or involuntary,
such as through a judicial lien, would, absent avoidance, have the same
preferential impact as a transfer of money from a debtor to a creditor
in payment of a debt. If the security interest was created in the
creditor within the 90 day window, and if other requirements of section
547(b) are satisfied, the security interest can be avoided and the real
property sold by the trustee free of the security interest (subject to
homestead exemption). All unsecured creditors of the debtor, including
the creditor whose lien has been avoided, will share, pro rata, in the
distribution of assets of the debtor, including the proceeds of the sale
of the real estate

2 Responses to “MERS and civil code 2932.5 and Bankruptcy code 547 here is how it comes together”

I am glad I found this website. I am presently on a 30 writ of possession (must be out of my house by 10/31/2010)
Wrongful foreclosure, wrongful U.D., Court wrong jurisdiction for title and ownership. I am open for suggestions.

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL) ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET . Sunday – MAY 19, 2019 Is a Homeowner’s Appeal Moot Upon the Sale of Foreclosed Property? — Another […]

WAPO- The grass got long. Jim Ficken knows it. But was it so long that he should have to pay the city of Dunedin, Fla., nearly $30,000 and lose his home to foreclosure? Ficken, for one, would rather ask a judge. The 69-year-old retiree is now at risk of losing his home because he doesn’t […]

Consumer Financial Services LAW MONITOR- On April 29, New Jersey’s governor signed into law bill A4997, known as the Mortgage Servicers Licensing Act. As the title indicates, the Act creates a licensing regime for servicers of residential mortgage loans secured by real property within New Jersey. As with many state licensing regimes, the Act exempts most ban […]

Pamela Mosley was just starting a new business when she was diagnosed with breast cancer. Unable to work for the next 13 months she fell way behind on her mortgage payments and was about to be foreclosed on. WFMYNEWS2- Pamela Mosley is the type of person who does things, anything and everything. Mosley has three […]

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL) ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET . Sunday – MAY 12, 2019 Foreclosure Workshop #74: Validity Versus Falsity — Proven Successful Ways in Which Homeowners […]

Lexology- On April 29, the New Jersey governor approved several bills related to mortgage lending in the state. According to a press release issued by the governor, the package of nine bills addresses the state’s foreclosure crisis and includes the following: A 4997, known as the Mortgage Services Licensing Act, requires persons who act as mortgage servicers […]

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL) ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET . Sunday – MAY 5, 2019 Foreclosure Workshop #73: Wells Fargo Bank v. Prentice – Highlighting Another Emerging Challenge […]

It seems nothing gets a judge angrier than being challenged on the court’s misconception of law. In 42 years of trial experience my conclusion is that sometimes you need to risk veins popping in the neck and even contempt citation to get your point across. Yet in the heat of the moment it is easy […]

Editors; Note: Everyone looking for an attorney should listen to this show. Every lawyer thinking about turning down or accepting a case involving foreclosure defense should listen to this show. Thursdays LIVE! Click in to the Neil Garfield Show Tonight’s Show Hosted by Charles Marshall Call in at (347) 850-1260, 6pm Eastern Thursdays Charles Marshall is on […]

Until this decision I had assumed that Qui Tam actions were essentially dead in relation to the mortgage meltdown. Now I don’t think so. The question presented is whether actions brought by a private person acting as a relator on behalf of a government entity can bring claims for damages under the False Claims Act. […]

In response to my blog post last week about whether there might be causes of action for royalty or other damages or offset arising from the fact that the loan is actually a small part of a much larger group of transactions in which the borrower is a party but not a participant in profits, […]

New York State Judge Arthur Schack passed away on May 2nd, aged 71. As phrased by “Summer Chic” “he was nothing short of a mensch which, in Yiddish, is an honorific not bestowed lightly. “His life was a testament to compassion; evidenced during his sixteen years on the bench in Brooklyn’s State Supreme Court and, […]

It’s easy to blame borrowers for loans that are in “default.” The American consensus is based upon “personal responsibility”; so when a loan fails the borrower simply failed. But this does not take into account the hundreds of millions of dollars spent every year peddling loans in the media and the billions of dollars paid […]

Listen to Show Click Here: http://www.blogtalkradio.com/neilgarfield/2019/05/16/escape-from-bankster-fraud—case-study-in-the-wamu-chase-fraudulent-scheme Hello, Neil Garfield here and this is Thursday April 25, 2019. Tonight, with the help of my guest Stephen Renfrow, we are going to take a closer look at the whole fraudulent scheme surrounding the false cla […]

Banks should be intermediaries, not the principals in a transaction. If you write a check your bank is not buying the TV. Original documentation and actual facts clears everything up. But what happens if original documentation disappears like it did in the mortgage meltdown? We are left at the mercy (nonexistent) of the banks who […]

“While overall foreclosure activity is down nationwide, there are still parts of the country where we may need to keep a close eye on,” said Todd Teta, chief product officer at ATTOM Data Solutions. “For instance, Florida is seeing a steady annual increase in total foreclosure activity for the 8th consecutive month, which is being sustained by a constant […] […]

Thursdays LIVE! Click in to the Neil Garfield Show Tonight’s Show Hosted by Neil F Garfield Call in at (347) 850-1260, 6pm Eastern Thursdays Tonight’s guest is Stephen R Renfrow, born 1957 in Louisiana. He graduated with Honors from Louisiana Business College and Bakers Professional Real Estate College. He has extensive experience in Banking and Real Estate […]

LivingLies is still LivingLies Livinglies.wordpress.com=Livinglies.me Millions of people use LivingLies as a resource for considering foreclosure defenses, new laws and even law enforcement. A few weeks ago I added PureChat for people to ask direct questions. The Chat function is located at the bottom right of your computer screen. I usually respond fairly q […]

Please address comments suggestions, case law and statutes to the following email address: NeilFGarfield@hotmail.com I am currently looking at a few new strategies. I will briefly outline them here not as recommendations but as possibilities that I think deserve exploration. As part of the collaborative effort of the LivingLies blog started in 2007 I am […] […]

References to sales of loans and servicing rights are usually merely false assertions to distract homeowners and lawyers from looking at what is really happened. By accepting the premise that the loan was sold you are accepting that the loan was (a) real and (b) owned by the party who was designated to appear as […]

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Originally published in October, 2008 this is a revised version of an article that correctly articulated the main weak points in the cases being presented for enforcement of mortgages and deeds of trust. Back then I made a few errors as to the actual duties of the trustee. I found out later that there were […]

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Originally posted in September 2008, here is my update of issues that lawyers, regulators, judges and even borrowers have still not quite absorbed: Some time ago we mentioned on these pages that the auditors who certified the financial statements (KPMG, here) would come under intense scrutiny simply because they MUST have known, by simple common […]

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Robert Wilbert | Latest News | April 29, 2017 The Debtor testified that RCS notified him that on June 1, 2016, Ditech would begin servicing the Note. A Ditech representative contacted the Debtor in June by phone and informed him that according to Ditech’s records, the Debtor was $2,000.00 in arrears on the Note. The […]

I would only add that none of the Trusts actually come to own the debt, loan, note or mortgage anyway. The creation of “assignments” and “powers of attorney” merely create the illusion of a transaction that never occurred. Rod Ciferri is licensed in New York State. I strongly recommend that lawyers read the following excerpt […]

By Tony Sarabia Published in Los Angeles Daily Journal January 3, 2013 Litigators often reach for doctrines such as res judicata or collateral estoppel to narrow the scope of a case. Res judicata prevents re-litigation of the same claim that was litigated in a prior case. Collateral estoppel prevents re-litigation of the same issue that […]

Getting the 50,000 or three times the actual damages (b) After a trustee’s deed upon sale has been recorded, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall be liable to a borrower for actual economic damages pursuant to Section 3281, resulting from a material violation of Section 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 292 […]

2920.5. For purposes of this article, the following definitions apply: (a) “Mortgage servicer” means a person or entity who directly services a loan, or who is responsible for interacting with the borrower, managing the loan account on a daily basis including collecting and crediting periodic loan payments, managing any escrow account, or enforcing the note […]

2920. (a) A mortgage is a contract by which specific property, including an estate for years in real property, is hypothecated for the performance of an act, without the necessity of a change of possession. (b) For purposes of Sections 2924 to 2924h, inclusive, “mortgage” also means any security device or instrument, other than a […]

CIVIL CODE SECTION 2920-2944.10 2920. (a) A mortgage is a contract by which specific property, including an estate for years in real property, is hypothecated for the performance of an act, without the necessity of a change of possession. (b) For purposes of Sections 2924 to 2924h, inclusive, “mortgage” also means any security device or […]

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CONSTRUCTIVE FRAUD: The tort negligent misrepresentation (also known as “constructive fraud”) requires that each and all of the following elements be proved: “(1) a misrepresentation of a past or existing material fact, (2) without reasonable grounds for believing it to be true, (3) with intent to induce another’s reliance on the fact misrepresented, (4) [ […]

CONCEALMENT FRAUD: The tort of deceit or fraud by concealment requires that each and all of the following elements be proved: “(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally […]

PROMISSORY FRAUD: The tort of deceit or fraud by a false promise requires that each and all of the following elements be proved: (1) a promise made regarding a material fact without any intention of performing it; (2) the existence of the intent at the time of making the promise; (3) the promise was made […]

PROVING FRAUD and or MISREPRESENTATION: DECEIT OR INTENTIONAL FRAUD The tort of deceit or intentional fraud requires that each and all of the following elements be proved: “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable rel […]